Enhancement of property tax must follow proper procedure and justification to be legal and sustainable.

MOTILAL B. NAIK, J.

( 1 ) THIS Second Appeal is directed against the judgment and decree in A. S. No. 79 of 1985 dated 9-12-1987 on the file of the I Additional District Judge, kurnool.

( 2 ) THE first appellant (since died) was the plaintiff in the suit who filed the same against the respondent-Municipality seeking a declaration that the proposed enhancement of house tax from Rs. 891-52 ps. per half year to Rs. 3209- 50 ps. per half year for the building D. No. 40/317-D Kurnool is illegal and void and for a permanent injunction restraining the defendant from collecting the enhanced tax.

( 3 ) ACCORDING to the plaintiff, the building isused for non-residential purpose as a hotel. It was assessed to tax half yearly for Rs. 891 -50 ps on an annual rental value of Rs. 5,600/ -. While so, the defendant-Municipality issued a special notice dated 22-3-1982 proposing to enhance the tax to Rs. 3566. 10 ps. per half year. As against the said notice, the plaintiff preferred a revision petition before the Municipal Authority. The defendant-Municipality reduced the tax from Rs. 3566. 10ps. to Rs. 3209/-per half year. It is the case of the plaintiff that there was no addition or improvement to the building for the last several years. The defendant-Municipality in the notice compared the suit building to that of another building which is let out to Karur Vysya Bank which was fetching a monthly rent of Rs. 1400/ -. It is stated by the plaintiff that the building let out to Karur Vysya Bank is a pucca building with RCC roof whereas the suit building is not a pucca building and therefore, there is no justification in enhancing the house property tax to Rs. 3209/ -. Even otherwise, it was contended by the plaintiff that the procedure contemplated in terms of Sec. 87 of the Andhra Pradesh Municipalities Act as well as the fixation of fair rent as per the provisions of Section 4 of the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960 was not followed and therefore, any enhancement without following the proper procedure is illegal and cannot be sustained.

( 4 ) ON behalf of the defendant-Municipality, a detailed written statement was filed contending that the building which is leased out to Karur Vysya Bank was fetching a rent of Rs. 1400/- per month, which is smaller than the suit building, and a comparative analysis was made and basing on enquiry, the enhancement was made from Rs. 89150 to Rs. 3209/- and therefore/there was no illegality in such fixation.

( 5 ) ON the basis of the averments, the trial Court framed appropriate issues and after trial, decreed the suit while quashing the special notice dt. 22-3-1982 issued by the defendant-Municipality seeking to enhance the property tax holding that the tax arrived at is not based on any procedure. 12. Accdrdingly, the judgment and decree of the lower Appellate Court in a. S. No. 79 of 1985 are set aside. Consequently, the judgment and decree of the trial court in O. S. No. 856 of 1982 are confirmed. 13. In the result, the Second Appeal is allowed. No costs.

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